Tuesday, August 20, 2013

Robert Galvin ran Motorola for 30 years making it into perhaps the best company in the world at the time. He focussed a lot of his attention on innovation, problem solving and leadership. He came to see them as inexorably linked.

At one point he was concerned that too many questions, problems and decisions were bucked up to the top people in the company. He believed that many of the men and women in the labs, offices and factories were more than capable of dealing with most of these. Yet, the structure did not allow them to exercise that level of decision making.

Galvin urged certain of his managers to work out a problem solving methodology to involve those closest to the subjects. This initiative proved fruitless. With time it dawned on Galvin that the common believe in manager’s wisdom over worker’s wisdom was too entrenched.

He tried different techniques himself. At one point he and Walter Scott, who was heading the largest manufacturing operation at the time started a series of unstructured meetings. Other teams started other initiatives. Eventually they developed a methodology called Participative Management Program.

Motorola’s early efforts in tapping into the judgements and decision making capabilities of the broader workforce led Galvin to recognize he was actually tapping into leadership qualities of all these people. Eventually he came to appreciate the depth of this leadership capability in all people. It was greater that traditionally thought. He said, “Their full potential is yet to be fully tapped. Of this I feel confident, our people at all levels of responsibility will rarely be found wanting as the appreciation of their qualities are more evidently invited and trusted.” In other words, people will rarely fail to come up to the level expected of them.

Later, one of these invited and trusted groups led a grass-roots initiative by some Motorola engineers to look at defect rates differently. Their method became a product whose trademark belongs to Motorola - “Six Sigma”.

(Our methodology, Behavioral Advantage, uses Galvin’s insights into people as a foundation, then we supercharge the ideas using some more recent psychological insights that Galvin would have loved.)

Sunday, August 18, 2013

I am engaged in a LinkedIn discussion on the annual performance review. The question under discussion asks "What would make the annual performance review superfluous?"

The two issues that are getting the bulk of the attention in the discussion are: the frequency of the feedback (and the recommendation is you do more of it); and the notion that the person giving the feedback isn't well trained or using a particular appraisal methodology, (the recommendation is that you use some particular methodology for the appraisal, and that you do it more frequently).

The most interesting thing that emerges from the discussion is how locked-in participants are to the notion that a manager to subordinate performance evaluation should be done at all. They are locked-in that a performance appraisal must be done, and that its the manager’s job to do it.

Many people who go into HR have a psychology background. The manager-authored performance reviews present an obvious psychological flaw that is being ignored. Experimental psychologist have shown us time and again that “Managers get the performance they expect.” Thus, when a manager writes a performance appraisal they are simply telling us what performance they expected. Their appraisal is right, of course, the performance typically is as they describe it. But the studies show that an employee’s performance is largely determined by the predisposition of the manager (see http://greatmanager.ucsf.edu/files/Leadership&Expectations_PygmalionEffects.pdf).

As weird as this sounds, if you want your company to perform well, convince your managers that their subordinates are extraordinary performers and that’s what you’ll get. It also helps a great deal to convince the employees as well that they are great performers. We have some marvelous examples that show this works!

Tuesday, August 6, 2013

Most people describe accountability leaving out its most valuable character. It is most often described as "acknowledging and taking responsibility for actions, decision, policies, outcomes, and consequences". This accountability is ‘State-of-Being-Accountability'. It is the state of being culpable for the action. This sort of accountability is described both as individual accountability on the part of employees, and the accountability of the company as a whole. State-of-Being-Accountability is the foundation of the annual performance review.

The former Chairman of NASDAQ, Bernie Madoff was accountable in this way. He was called to task for his actions and their consequences. He was liable and answerable for the ponzi scheme he cooked-up, which cost his clients over $18 billion. He now finds himself in the state-of- being accountable for the next 150 years. State-of-Being-Accountability is a reckoning.

Accountability has another face to it. It is the activity of accountability. This discipline of accountability is the audit face of accountability. You set goals and schedule frequent audits against performance.

It is the simplest of activities. Among business activities, active accountability may be the single most powerful tool in business. Yet, as Pat Lencioni points out, it is more natural for leaders to shirk holding an employee accountable. In the boss-to-subordinate relationship, holding someone accountable can create an uncomfortable situation. We naturally avoid uncomfortable situations. Pat says this avoidance is one of the largest barriers preventing companies from achieving their true potential.

In Madoff’s case, his clients would have been far better off if there had been a discipline of accountability in place.

Some companies are very good at active accountability. They know it requires four acts of discipline. First, whatever you decide to measure must be S.M.A.R.T. (see the side bar). Second, it must be assigned to a specific individual, (never should more than one person be accountable for the goal). Third, it must be reported on in a prescheduled meeting or routine. A weekly meeting is a great place to do this reporting. And fourth, if the goal is missed significantly, the process must address how to do a course correction to achieve the goal going forward. In that case, something must change.

A key value of the discipline of accountability is your ability to solve problems when they’re still green. The earlier you see a problem developing the faster you can fix it and thus reduce its impact. It can make your business more predictable and, of course, more profitable.

Vern Harnish, Gino Wickman, and those of us at THNK recommend a weekly meeting as the place to structure the discipline of accountability. It is the backbone of Vern Harnish’s Gazelles system. Gazelles group structures a section of the meeting just to reporting the numbers. We are particularly fond of the way Gino Wickman (author of Traction) has implemented this agenda item. Team members report their weekly numbers to their peers by simply stating “Met” or “Did not meet”. If it’s a “Did not meet” then it goes up on the list of new issues, no discussion (if it turns out to be important the team will discuss it later in the meeting).

Pat Lencioni recommends that in staff meetings the team creates a real-time agenda based on what the team feels are its top priorities for the week. A finer point on this is provided by Gino Wickman. In his Entrepreneurial Operating System weekly meeting, after the team has reported the numbers, they go down the list of issues and prioritizes the top three issues. The rest of the meeting utilizes a very effective problem solving methodology to resolve issues and create SMART to-do’s that will be due and reported on in the next weekly meeting. We have a client who is so good at this process that they get through all their issues in their weekly 90 minute meeting almost every time. Using this type of a system resolves issues very quickly and the business becomes far easier to manage and more predictable..

What makes this process work most effectively is what we call peer-2-peer accountability. It is the most effective form of accountability according to Pat Lencioni. Peer-to-peer accountability is also central to the business process in Morning Star company where they use a written peer-to-peer contract.

Peer-to-peer accountability can also solve another difficult accountability problem. People find it easier to confront someone about missing a clear number than to confront someone about their behavior. With a peer-to-peer accountability this becomes easier to do because more people are openly involved. Alternatively, when you set a goal you can also define what behaviors will advance a goal and what behaviors will not. When a goal is missed, it is either a behavior mismatch or something external happened. In this context the peer group can verify that the colleague is delivering the prescribed behaviors and, if so, openly challenge the prescribed behavior for its effectiveness. This conversation is focussed on getting the right result, not on blame.1

Whatever way you construct it, having a discipline around the activity of accountability enables the business to move forward with focus and effective effort. It also removes a good deal of ambiguity, which turns out to have a very positive impact on employee engagement.

1 At THNK we implement peer-to-peer accountability with companies that goes beyond accountability around deliverables. The methodology is called Behavioral Advantage and gives the peer group the tools to define success behaviors and hold people accountable for those behaviors. It also enables the peer group to focus on two key motivators for every team member; Identity and Meaning, to ensure that not only are the right behaviors forthcoming, but they are highly motivated right behaviors.